Among the garages and construction materials stores surrounding it on every side in the Ness Ziona industrial zone, sits an Israeli startup with almost 60 million users, which has signed strategic cooperation agreements with Deutsche Telekom and Amazon.com, investors of the caliber of Qualcomm and SanDisk Corporation (Nasdaq:SNDK), and customers like Coca Cola and Pampers.
Magisto, founded in 2009 by CEO Dr. Oren Boiman and CTO Dr. Alex Rav-Acha, is arousing great interest among users, investors, and commercial companies because of the major problem it is intent on solving the huge number of photographs and video clips taken by people who do almost nothing with them. A check by Magisto found that the average user takes 150 pictures and films 7.5 video clips of an average of seven minutes long each month.
Once upon a time, we were more careful with our finger on the flash button. Before there were digital cameras, we thought twice before we took a picture, both because we were not able to see the picture immediately and because of the cost of the film and its development. Today, the number of pictures taken by people is almost infinite: family events, parties, weddings, trips, or just a well prepared lunch we want to show to people who follow Instagram, not to mention young parents documenting every move made by their children in still photos and video clips. Almost none of this documentation ever sees the light of day or is shared on the social networks, apps, or e-mails, and even if its does, it merely bores those who see it.
"It was disappointing"
This insight occurred to Boiman back in 2005, when he was beginning his doctorate in computer vision at the Weizmann Institute of Science, and had just become a father for the first time. "I bought a camera and took a lot of pictures and movies. It was all new for us, and we wanted to preserve these moments, and share them with people," he remembers. After two months, the couple decided to celebrate the birth of the daughter by showing their guests a file documenting the first weeks of their baby's life. "When I looked at the pictures for the first time, I was shocked at how boring it was. Not only was it boring; it was also disappointing. You remember those moments as something moving or funny, but when you look at it later, it doesn't stay like that."
According to Boiman, "One of the insights was that feeling is in the head, not in the pictures. In Hollywood, they realized over a century ago that you have to inject the feeling back into people's heads. That's how the film industry started. The first times they screened video, it was a long shoot, but they realized that it was so completely and utterly boring that the Lumiere brothers, two of the founding fathers of cinema, said, 'The cinema is an invention without any future.' A few years later, they invented video editing."
It took Boiman and his wife two weeks to make the movie about their daughter. "Even when I finished it, it still looked so-so," he remembers. "I realized that there was a big problem here people invest hours in filing video and stills, but they don't look at it. After I went through it once, I understood that it's hard, and it had to be simplified." That was how the idea for Magisto, founded three years ago, was born.
"We believe that the experiences and memories that we create were not meant to gather dust inside the machine; they were meant to be shared around," explains COO Tal Dagan. "The problem is that some things are boring. A 3-4 minute video clip is usually boring. I doubt whether the person who filmed it will watch it more than once. It's just like the raw material from a movie of a wedding."
What does Magisto do to change this pattern? The product developed by the company takes the video and the photos, and analyzes them deeply: what is in the video, who the main actors are, what they are doing, what actions are interesting, what can be highlighted, and when to use them in the video clip. "Then they take all the parameters from a lot of video segments and photos, and combine them into a movie whose purpose is to make people feel," Dagan explains.
Magisto's product works in two ways: manually and automatically. In the manual option, the user has to select the photos and video clips and event itself - a trip; an exciting, dramatic, or sad event. A musical background is added to the film, adapted according to the country, so that there are songs in Hebrew for Israel, together with songs in English.
The other (automatic) option is that we find video clips and pictures from your telephone - even if it's a trip from a year ago - and show you a movie with emotion. You can also go to the beach with your family, photograph stills or video there, and get a notice when you get home about a new film prepared especially for you automatically from the day's events," Dagan says.
Magisto does not offer picture storage service, like Yahoo!'s Flicker, Google's Picasso, or Microsoft's OneDrive. It tries to take photos and videos stored on a telephone, or using cloud services, such as Google Drive or iCloud, and make interesting movies out of them. One of Magisto's main competitors is Google, which offers cloud-based photograph backup service under the name Google Photos. This application makes it possible to automatically improve various photographs using a feature called Google Awesome. "I think that we get much better results, which can be seen in the volume of usage of our application, despite the size of a company like Google," Boiman declares. "They do something very simple. They have no aspirations to replace the video editor. We analyze what's going on within the content itself, and inject feeling," Dagan explains.
Cooperation with Amazon.com and Samsung
Meanwhile, Magisto continues to grow at a rapid pace. By the end of the month, the company will have 60 million users of its product, which is available for all operating systems, including social networks, mobile, and desktop, other than a version for Macintosh computers, which will be issued shortly. More than 1.25 billion sections of content have been used to date in the making of over 130 million films. The company claims that 90% of its traffic is organic, so that it spends relatively little on acquiring users.
Magisto's success has not escaped the eyes of a number of recognized industry big names. In addition to raising $23 million from names like SanDisk, Qualcomm, Magma Venture Partners, Li Ka-shing's Horizons Ventures, and Mail.ru Group, Magisto has also signed cooperation agreements with leading cellular operators, such as Deutsche Telekom, Softbank, and Three, which are marketing its application to their customers through SMS messages or on their company website, and also through the local operators working with them.
The company also cooperated with the launch of the Samsung Note 4, and was part of a the Galaxy Gift package, which provided free applications to phablet users. Another important cooperate effort was with Amazon.com, with Magisto's application being installed in advance on FireTV devices, together with adaptation to Phone Fire and Kindle Fire devices. The company also cooperates with brands, such as Coca Cola and Pampers, and helps them create user involvement by creating videos designed to touch and move the users. Payment from the brands is based on the cost per click (CPC) model, or a one-time payment.
Still, the company's most familiar business model is based on premium services offered by the application. The basic service is free of charge, but allows only limited use of a few photos and videos of limited length. With the premium services, which can be purchased for a month, a year, or for life, the services are more extensive. The company recently added another service that allows use of HD-quality videos. Viewing the videos does not require installing the company's application.
Between Ness Ziona and Silicon Valley
Together with its great success, what still seems like a romantic story that is nice to hear is the company's unusual location, where 35 of Magisto's 50 employees work. "We chose Ness Ziona as a rather convenient place in the middle, close enough to Tel Aviv, but which also allows us to employ people coming from Ness Ziona, Rehovot, and Rishon Lezion. When you work in Tel Aviv, you can't employ certain people because of the traffic jams," Boiman says.
"The location may not be routine, but here you can step out of the office into the industrial zone, and remember whom you're working for - these are our users. That's one of the most enjoyable things to sit in a restaurant in front of the office, and someone there is talking to his friend about the move he made yesterday with Magisto. We want to reach everybody, not just the ones in the ivory tower who will praise you on TechCrunch," he adds.
Meanwhile, Boiman has left Ness Ziona for Silicon Valley to be closer to the investors and the target market, and now gets his humus from famous high tech entrepreneur Oren Dobronsky, instead of the Ness Ziona restaurant. This is in addition to marketing in New York and developing the Android application in Ukraine. What comes next? I don't know if we'll stay in Ness Ziona. I hope so," Boiman says. "It's surprisingly convenient. We didn't think we'd be there for so long."
Published by Globes [online], Israel business news - www.globes-online.com - on March 8, 2015
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